Sensex down 1,076 points since the high of 21,409 on Jan 13
Markets will be volatile ahead of the interim budget next week with analysts expecting finance minister P Chidambaram to announce some populist moves with an eye on elections in May, keeping stock markets on the edge.
The Sensex has lost 1,076 points since the high of 21,409.66 on January 23. The index closed 20,334.27 on Monday, as market awaits the interim budget on February 17.
Experts said from pro-growth, the vote-on-account next Monday will be focused solely on fiscal deficit, which the government may be able to bring down from 4.9 per cent in FY2012-13 to 4.8 per cent in current financial year.
“There are no expectations (by the market) from vote-on-account,” said Gaurang Shah assistant vice president at Geojit BNP Paribas. “Chidamabram may say lot of things, but the government is a sinking ship. The market knows this. Immediate concern is the IIP and CPI numbers on Wednesday and WPI, which will be released on Friday,” he added.
Foreign institutional investors (FIIs) sold a net of Rs1,921.40 crore through the stock exchanges in February.
Paras Bothra VP of Ashika Stock Broking said that there is a fear in the market about the possibility of a populist budget ahead of elections. Market will be in a range-bound mode till the elections are done with, he said, adding any major reforms would come only from the next government. From pro-growth, the vote-on-account will focus on fiscal deficit. The telecom spectrum auction and “forced” divestment of public sector undertakings would help the government to keep fiscal deficit at budgeted levels.
Shah of Geojit BNP Paribas said there is a possibility that this will be a populist interim budget going into the elections. “My forecast is we will have mid-March to end of May period completely focused on the elections and the outcome. By the third week of May, we’ll have a new government,” he said.
Reports said the government in the past five years raised more than Rs 78,000 crore from disinvestments and another Rs 1.5 lakh crore or so from telecom spectrum auctions.
“We have seen forced divestments, wherein the domestic institutions led by Life Insurance Corporation of India (LIC) buying most of the government share sale,” said Bothra.
Ritesh Parekh VP equities at Motilal Oswal Securities, reckoned there would not be massive doles of populist measures in the budget. “Some kind of populist steps can be expected, but if it is full of big populist steps then the government may not be able to pass the vote-on-account,” he said.
Parekh said some bills such as Telangana will keep the Parliament rocking and may keep other important bills at bay. “News flows will put the markets volatile,” he said. Till December last year the consensus was for a BJP-led government at the centre after the Lok Sabha polls in May. But with Aam Admi Party (AAP) emerging in Delhi elections, there is uncertainty on the election outcome, which is not good for markets in the run-up to the national elections, he said.
Markets will be volatile ahead of the interim budget next week with analysts expecting finance minister P Chidambaram to announce some populist moves with an eye on elections in May, keeping stock markets on the edge.
The Sensex has lost 1,076 points since the high of 21,409.66 on January 23. The index closed 20,334.27 on Monday, as market awaits the interim budget on February 17.
Experts said from pro-growth, the vote-on-account next Monday will be focused solely on fiscal deficit, which the government may be able to bring down from 4.9 per cent in FY2012-13 to 4.8 per cent in current financial year.
“There are no expectations (by the market) from vote-on-account,” said Gaurang Shah assistant vice president at Geojit BNP Paribas. “Chidamabram may say lot of things, but the government is a sinking ship. The market knows this. Immediate concern is the IIP and CPI numbers on Wednesday and WPI, which will be released on Friday,” he added.
Foreign institutional investors (FIIs) sold a net of Rs1,921.40 crore through the stock exchanges in February.
Paras Bothra VP of Ashika Stock Broking said that there is a fear in the market about the possibility of a populist budget ahead of elections. Market will be in a range-bound mode till the elections are done with, he said, adding any major reforms would come only from the next government. From pro-growth, the vote-on-account will focus on fiscal deficit. The telecom spectrum auction and “forced” divestment of public sector undertakings would help the government to keep fiscal deficit at budgeted levels.
Shah of Geojit BNP Paribas said there is a possibility that this will be a populist interim budget going into the elections. “My forecast is we will have mid-March to end of May period completely focused on the elections and the outcome. By the third week of May, we’ll have a new government,” he said.
Reports said the government in the past five years raised more than Rs 78,000 crore from disinvestments and another Rs 1.5 lakh crore or so from telecom spectrum auctions.
“We have seen forced divestments, wherein the domestic institutions led by Life Insurance Corporation of India (LIC) buying most of the government share sale,” said Bothra.
Ritesh Parekh VP equities at Motilal Oswal Securities, reckoned there would not be massive doles of populist measures in the budget. “Some kind of populist steps can be expected, but if it is full of big populist steps then the government may not be able to pass the vote-on-account,” he said.
Parekh said some bills such as Telangana will keep the Parliament rocking and may keep other important bills at bay. “News flows will put the markets volatile,” he said. Till December last year the consensus was for a BJP-led government at the centre after the Lok Sabha polls in May. But with Aam Admi Party (AAP) emerging in Delhi elections, there is uncertainty on the election outcome, which is not good for markets in the run-up to the national elections, he said.